First Letter from Tim Ferguson to Abigail Disney, February 2024

Our political trajectory after the Second World War not only echoes Rome’s after the Third Punic War, it also tracks ancient Greek historiography on regime change.[2] Your profound sense of conscience, however, reminds us that patriotism and benevolence is still found among the very wealthy. And it drove you to make The American Dream and Other Fairy Tales. Telling the story of five ordinary Disney employees barely scraping by, your documentary differs from a typical Disney movie in that the good guys don’t win and nobody lives happily ever after.

But as you noted in your film, neither the Disney company nor its management are the bad guys. They aren’t responsible for systemic wealth concentration. As far as the business game goes, Disney does well for its owners and customers despite any grievances of its workers. Since those grievances aren’t unique to Disney but reflect a national pattern, we shouldn’t presume that Disney – or other enterprises facing similar complaints – doesn’t play fairly. Even if Disney wanted to go rogue and play a different game than the rest of the market, it would truly be Jiminy Cricket taking on Darth Vader: Disney’s roughly $200 billion market cap is only a tiny slice of the $30 trillion that must drop down from top to middle, until the middle class acquires its rightful share of at least fifty percent of national wealth.[3]

Our greatest enemy isn’t the players in the game or the rules of play. Capitalism isn’t evil. It’s an amoral bundle of legal techniques like private property, limited liability corporate franchises, and securities exchanges facilitating profits and capital accumulation. This, in turn, enables great and risky ventures like sponsoring dangerous ocean voyages, building large factories, developing drugs, and sponsoring dangerous space voyages. The avarice and ambition that fuels innovation and entrepreneurship isn’t a problem either, or the competition that variously makes winners and losers within free and fair markets, provided the winners don’t win by being predators or parasites, the losers don’t lose because of their race, sex, or some other immutable characteristic, and all are willing and able to keep playing.

The enemy isn’t even the goal of the game, for to divert men from the pursuit of gain would be to alienate them from their own nature. Mankind’s chief preoccupation is to improve its status.[4] This is mainly achieved through wealth accumulation because of all the ways to demonstrate one’s excellence, wealth is the easiest to obtain, compare, display, and translate into influence and power. That’s why the rich and famous still pursue it long after their fortunes surpass any practical utility: to serve their innate and insatiable pretensions.

And owing to its ubiquity and utility, all institutions – church, school, government, media – not only tolerate but celebrate even the most unconscionable wealth accumulation. What university chancellor or political candidate won’t fawn over a wealthy prospective donor however his riches were derived? This produces virtually universal approbation of great fortunes whether they originated from genius, innovation, labor, luck, birth, predation, or parasitism. Universal avarice in turn produces an ingratiating deference to the habits, opinions, and preferences of the richest men, even when they are repugnant and reviled.

Our biggest problem is rather how we take score. This is because our political outcomes flow from the method by which we measure economic success. In measuring economic success, our most powerful actors favor indiscriminate capital accumulation without regard to any other metric, or whether it is deployed by enterprises or stagnates within households.

The cause of inexorable wealth concentration is thus concisely stated: No affluent society has ever held, during time of peace, any standard of excellence or success rivaling maximalist wealth accumulation. Its natural progression has never been serenely reversed,[5] and it’s been fatal to all republics whose life was not cut short by the conquest of another.[6] The only response so far administered are palliatives to ameliorate its symptoms. Subsidies, safety nets, the Cura Annonae, the Zakat, old-age support in the Han Dynasty. Like morphine, these measures have alleviated suffering and sedated revolutions – but never cured the extreme wealth concentration that our innate status addiction inevitably produces. And these treatments come with side effects like dependency, patronage, and inflation.

If we would reverse extreme wealth concentration while yet preserving capitalism’s productive energies and cultivating the middling virtues essential for self-government, the cure is as simply stated as the disease: median-top household wealth tethering at an efficient ratio, say 10,000:1. Anchoring those households collectively wielding market power to the median such that their outcomes rise and fall lockstep in mathematical proportion thereto requires them to raise the median in order to enjoy any future gains. In other words, we’d put plutocracy on an incentive plan. And like a true incentive plan, we’d let market actors determine how to raise the median – with no regulations upon enterprises – taxing households only in proportion to market failure and imposing no absolute limit on their prospects. Howsoever they decide to raise the median, elites must in any case open the gates of upward mobility.  

Taxing only the very top households works best since they are the final owners of almost all wealth, and none could evade if we took enforcement seriously. We could achieve this by a household tax adopted via constitutional amendment, like the one Thomas Jefferson suggested to distribute luxury tax revenues to the States in his Second Inaugural Address. But unlike taxes designed to generate revenues to facilitate government-administered wealth redistribution, our purpose is to promote voluntary wealth de-concentration through market actors.

A 10,000:1 ratio implies an initial wealth cap of $1.43 billion, a limit today surpassed by around 670 American households whose aggregate wealth exceeds it by about $4.4 trillion.[7] To grasp its incentive power, consider that at 10,000:1, every $1 gain to the median increases the cap by $10,000; every $10,000 by $100 million, every $100,000 by $1 billion.

This amendment may sound idealistic, but it doesn’t rely on good will or class warfare. It was conceived to harness human avarice: We should prefer a yoke around the plutocracy’s neck over a knife to its throat. And to ensure ratification, it would distribute all revenues raised by ratio enforcement in equal shares to each State which timely ratifies it, bypassing any Congressional inaction via Article V convention. With around 98,000 public schools, 1,600 public colleges, 1,000 public hospitals, 18,000 police departments, 29,000 fire departments, 19 million state and local employees, 35 million retirement system beneficiaries, and $6 trillion held in pension and university endowments, the States can make efficient use of their respective shares. And the proceeds, worth billions over time, can be used according to the dictates of their local constituencies, strengthening the principle of federalism.

You’ve been criticized for saying there is such a thing as too much money. But you’re right. At least within the ambit of households, and at least until the middle owns half, for that is the common ground on which ordinary Americans and political philosophers agree.[8] We write you not to ask for money, but to join us at that rally point.

Sincerely,

Tim Ferguson